The ancestors of the peoples now called the
Aborigines began settling Australia at least 40,000 and possibly as early
as 100,000 years ago. Bêche de mer traders from the Indonesian islands
regularly visited Australia's northern coasts before the first European
settlement in 1788, but when they began doing so is unknown. European interest
in the continent dates from the 16th century, when geographers hypothesized
that a southern land mass must exist somewhere between Africa and South
America to help counterbalance the land masses of the northern hemisphere.
Its discovery by Europeans arose from the search for new routes to the
East Indies across both the Indian and Pacific oceans. In 1567 Alvaro de Mendaña discovered
the Solomon Islands; in 1606 Luis de Torres touched New Guinea and supposed
he had seen the "great southern continent." Meanwhile the Dutch, rivals
of the Spanish, were entrenching themselves in the trade of the East Indies.
Explorer Dirk Hartog in 1606 landed on an island in Shark Bay, in present
Western Australia. In 1642 Abel Tasman discovered the island that now bears
his name, Tasmania. In 1644 he sailed into the seas lying between New Guinea
and Australia but failed to find the Torres Strait passage into the Pacific
Ocean. In 1768 the British government promoted
an expedition to Pacific waters for geographical and astronomical research.
Led by Captain James Cook, the group reached the east coast of Australia
in 1770. It followed the coast north for some 2,280 miles (3,670 km) from
present eastern Victoria to Torres Strait. Naming the land New South Wales,
Cook claimed it for Great Britain before proceeding through Torres Strait
to the Cape of Good Hope and then home.

The British colonization of Australia resulted
largely from the cessation of the transportation of convicts to the British
colonies in North America. This practice had played a major part in the
English penal system until the American Revolution put a stop to it. After
a fruitless search for other destinations for the ever-growing number of
prisoners being kept in hulks moored in the Thames River, the government
adopted a plan for sending them to Botany Bay in New South Wales. The first
fleet, under the command of Captain Arthur Phillip, left England in May
1787 and arrived at Botany Bay in January 1788. Phillip disliked the location
and soon discovered a harbor slightly to the north that appeared more satisfactory.
A landing was made at Sydney Cove, on Port Jackson, and the work of clearing
land and constructing necessary buildings was begun. The principal problems of the colony of
New South Wales were the provision of an adequate food supply, proper management
of the convicts, and the policy to be adopted with regard to convicts when
they became free. Providing food to meet the colony's needs
was a problem in the early period of settlement. The colonists were unable
to learn anything from the indigenous Australians, whose hunter-gatherer
life was well adapted to local conditions. As it turned out, although the
soil near Port Jackson (Sydney) was not fertile, crops could be grown farther
inland, and after a time the colony averted the threat of starvation. In
the absence of all luxuries and shortages, and even of necessities, rum
was highly prized; people commonly bartered essential articles to obtain
it. Transportation continued on a large scale
to New South Wales until 1840, to Tasmania until 1852, and to Western Australia
until 1868; convicts were sent at the greatest rate between 1825 and 1845.
Almost all of the 160,000 convicts were common criminals, but about 1,000
English and 5,000 Irish may be better described as political prisoners.
While under sentence, a few worked for the government, and those convicted
of further offenses were sentenced to penal settlements or to work in chains
on the roads, but most were assigned to work under free persons. Convicts
who behaved well might be freed from servitude by the governor, who also
had the right to give "tickets of leave," which permitted convicts to work
for themselves without being assigned to a specific person. Convicts whose
terms of transportation had expired rarely returned home. Until 1822 they
often received small grants of land, but usually before and always afterward
they went to work as ordinary laborers. To colonists who had never been
convicted, emancipists and expirees represented a social and political
threat that became more acute with the passage of time.

Arthur Phillip was the first colonial governor.
Bad health forced him to leave for England in 1792, and for the next three
years two temporary governors, John Hunter and Philip Gidley King, sought
in turn to administer the colony with the aid of a force known as the New
South Wales Corps, recruited in England. Their successor was William Bligh,
famous for his connection with the mutiny on the H.M.S. Bounty. Bligh attempted
to apply naval discipline to the colony and came into conflict with many
who were seeking to make private profits from the colony's struggles. Backed
by wealthy and powerful colonists, Major George Johnston, commander of
the New South Wales Corps, deposed and arrested Bligh. Johnston was tried
by court-martial for his part in this "Rum Rebellion," and in 1809 Colonel
Lachlan Macquarie became governor. Macquarie brought his own military unit,
the 73rd Highland Regiment, to Australia, and the New South Wales Corps
was sent back to England. Macquarie considered many of the emancipists
better citizens than some of the free settlers. He also undertook an energetic
building program, greatly improving the appearance of Sydney, improving
roads, and encouraging exploration.Such development was costly. The British government,
concerned about the expense and ready to believe Macquarie was treating
convicts too leniently, sent Commissioner John T. Bigge to investigate.
Bigge's reports led to the official encouragement of wool production, to
the tightening of convict discipline, and to the first granting of civil
rights to the free colonists. It was impossible to proceed rapidly toward
self-government in New South Wales as long as the differences between the
emancipists and the free settlers remained unsettled. Emancipists insisted
on their right to participate in the processes of government, while the
free settlers feared the granting of political privileges to men who had
once been convicts. A British parliamentary committee in 1837-1838 recommended
that the transportation of convicts be stopped. In 1840 the British government
put the recommendation into effect for New South Wales. The way was thus
cleared for a further step toward colonial self-government. An act of 1842
granted to New South Wales a legislative council of 36 members. Emancipists
were allowed to vote. The act was not democratic in the modern sense, in
that a property qualification was set up for voters and for eligibility
for membership on the legislative council. Bills could be vetoed by the governor or
sent to the British government for consideration, and the British government
retained control over the sale of land. Continued British control aroused
violent colonial opposition. Eventually, after seeing that a more liberal
colonial constitution was working satisfactorily in Canada, the British
Parliament passed the Australian Colonies Government Act in 1850, and the
colonial legislatures were permitted, subject to the consent of the British
government, to frame new constitutions for themselves. By 1856, constitutions had been framed
by Tasmania and South Australia as well as by New South Wales and Victoria.
The new bicameral colonial legislatures had power over crown lands and
were allowed to practice responsible government in the British and Canadian
manner. Queensland, opened to free settlement after transportation of convicts
to New South Wales ceased in 1840, was organized as a separate colony in
1859. Western Australia, founded in 1829 and sparsely populated, did not
receive representative institutions until 1870 and responsible government
until 1890.

All this time explorers had been discovering
the nature and extent of the Australian continent. In 1803 Matthew Flinders
circumnavigated the continent and prepared a map showing it in its entirety.
He urged that the term "Australia" should be used to denote the whole landmass.
Revelation of the general configuration of the continent, combined with
the fear of imminent French occupation of ports in the west and the north,
resulted in the annexation in 1824 of Bathurst and Melville islands, of
the area between east longitudes 135° and 129° in 1825, and of
the rest of the continent in 1829. In 1844 there began a series of attempts
to cross the interior. Captain Charles Sturt made an expedition to the
drought-stricken center and Ludwig Leichhardt to Port Essington on the
north coast. Robert Burke and William Wills, who set out from Melbourne
in 1860 and reached the Gulf of Carpentaria in 1861, were the first to
cross the continent from south to north. McDouall Stuart planted the flag
in the center of Australia in 1860 and successfully crossed from Adelaide
to Darwin in 1861-1862.

In 1851, the discovery of gold in New South
Wales changed the course of Australian history. A squatter brought gold
from a site near Bathurst to Sydney, and soon hundreds of miners were searching
for nuggets and gold dust. The diggings in Victoria were found to be the
most productive. The goldfields attracted large numbers of people from
the towns and countryside of Victoria and New South Wales, to the point
where other economic activities were often left shorthanded. And though
the population of the country as a whole remained largely British, immigrants
from abroad, pouring in to seek gold, boosted the population of Australia
from about 400,000 in 1850 to about 1,146,000 ten years later. The gold
rush greatly stimulated economic activity in the southeastern colonies.
It was necessary to construct buildings, manufacture equipment, and provide
cereals, meat, and dairy products for the new population. Prices rose,
and during these years the area under cultivation doubled. Bushrangers -- that is, highwaymen roving
the countryside singly or in gangs -- flourished along with the goldfields,
preying on travelers, isolated farms, and stagecoaches. The lawlessness
of some of the diggings paralleled that of the American Wild West. The
most notorious of the bushrangers was the Kelly gang, whose leader, Ned
Kelly, was finally captured in 1880 after a shoot-out in which the other
three gang members died. Kelly, hanged in Melbourne in 1880 for murdering
three police officers in 1878, has since become a popular hero of mythical
proportions. Other violence in the goldfields included riots, sometimes
targeted against Chinese diggers, and, in 1854, the Eureka Riots, when
troops dispersed rebellious miners protesting police bullying and general
poor administration of the digs. Six soldiers and 22 miners were killed
in these clashes. (See also Eureka
Riots) The value of the gold produced in Victoria
in the decade 1851-1861 varied greatly from year to year. The production
of 1852, nearly £17 million (about U.S.$81.5 million) was never again
reached, and the year 1861 saw a production of £7.8 million (about
U.S.$38 million). At the same time, the number of diggers was increasing,
and mechanical power and technology coming more and more into use. Individual
miners who lacked funds for large-scale enterprise were forced to leave
the goldfields for other activities. Gold rushes in Queensland in the 1880's
and in Western Australia in the 1890's drew miners from the southeastern
colonies, shifting the focus of goldmining to new mining cities such
as Mount Morgan in the former and Kalgoorlie in the latter. In the same
period, the mining industry diversified to other minerals, notably silver,
lead, and zinc around Broken Hill in the far west of New South Wales, and
copper on South Australia's Yorke Peninsula.

Eureka Riots

Eureka Riots, the rebellion in the Victoria, Australia,
gold fields in 1854 of dissatisfied miners, who built an armed stockade.
With the decline of income per digger, objections arose to the fee of thirty
shillings per month levied by the government. On Dec. 3, 1854, government
troops attacked the stockade and dispersed the rebels, who had gone so
far as to raise the flag of the "Republic of Victoria." An inquiry followed,
and in six months the government of Victoria had dropped the former fee
and put in its place a "miner's right" which cost $5 a year and gave to
the miner the right to vote. An export duty on gold was also levied to
make up for the loss of revenue by the former system.

The history of Australia after adoption of
the constitutions of the 1850's shows a strong desire to achieve democracy.
The constitutions embodied the principle of universal manhood suffrage,
although women's suffrage did not come until later (South Australia, 1894;
Western Australia, 1899; New South Wales, 1902; Tasmania, 1903; Queensland,
1905; Victoria, 1908). The secret ballot was adopted in Victoria in 1856.
In the powerful upper houses of the colonial parliaments, however, where
real decisions were made, democracy was compromised by the fact that each
member, wealthy and conservative, had more than one vote. There was also
considerable difficulty in the relations between the upper and lower houses
of the parliaments.

Land Tenure

Colonial governments wished to build up an
independent farming class and, despite the opposition of graziers (ranchers),
passed a number of acts designed to help prospective buyers purchase as
agricultural freeholds lands then being used as sheep runs. However, ranchers,
helped by credit from financial institutions, bought the land for themselves
in a process known as "dummying" and gradually came into formal ownership
of much of the land they had been using. Although the land acts stimulated
some expansion of mixed farming, typically based on varying combinations
of grain growing, dairying, and meat production, sheepherding for wool
continued to be the leading rural activity. The dominance of sheepherding
can be seen by the fact that in 1883 more than 8 million acres (3.2 million
hectares) in New South Wales were held in only 96 estates. The graziers met with economic hardship
in the last quarter of the 19th century. World prices showed a downward
trend, and overstocking and lack of adequate rainfall hastened the development
of dust-bowl conditions. Millions of acres were abandoned; the number of
sheep declined by 33 percent between 1891 and 1901, as the dingo and the
spreading rabbit plague reduced the carrying capacity of the land. Improved
breeding, the introduction of shearing machinery, and the building of paddocks
fenced with barbed wire failed to solve the graziers' problems. The farmers were better off. Although hit
by falling prices after 1880, they were helped by new agricultural machinery,
fertilizer, better strains of wheat, the provision of "rural credit," and
the penetration of the railroad into agricultural areas. On the Queensland
coast the sugarcane industry attracted settlers and capital.

Labor Movement

Labor organizations of the modern type date
from the 1850's, when unions in the building trades began agitation for
the eight-hour day. Labor unions were not, however, politically powerful
until after 1890. By that time miners, seamen, dockworkers, and sheep shearers
had become organized. The failure of strikes between 1890 and 1892 strengthened
the arguments of those in the labor movement who stressed the need for
political action. Some typical goals of Australian labor in
the 1890's were the restriction of immigration and exclusion of Asians;
abolition of sweatshops; adoption of systems of wage control and labor
arbitration; and old-age pensions. Victoria passed a factory act in 1885,
and during the 1890's, in all the colonies, acts for regulating factories,
mines, and public health, for the early closing of shops, and for the control
of conditions on ships followed in rapid succession. Compulsory arbitration
in industrial disputes and the fixing of wages by the government were first
introduced in South Australia in 1894 and in the other colonies by 1901.

Protectionism

Between 1860 and 1900 all of the Australian
colonies except New South Wales made efforts to encourage industry by tariff
protection. The decline in profits from placer gold mining had created
unemployment, and Victoria had been forced to resort to the customhouse
for revenue, lacking as it did the extensive receipts derived from the
continuous sale of Crown lands in New South Wales. Victoria's tariff was
slowly pushed up by pressure groups of manufacturers and workmen and by
politicians wanting revenue yet opposed to direct taxation. The differing
policies of Victoria and New South Wales caused many disputes on their
border, but it seems impossible to prove that either protective tariffs
or tariffs for revenue were primarily responsible for the prosperity enjoyed
by the Australian colonies in the 35 years before founding of the commonwealth.

The British government suggested the formation
of a central federal governing authority in 1847, but withdrew its
proposal in the face of colonial opposition. Conditions did not favor such
a development until the last two decades of the 19th century, when railroad
construction made colonial union more feasible. The feeling of being safe
from foreign threats was shaken by the growing interest of European powers
in the islands of the western Pacific. Convicts escaping from the French
penal colony of New Caledonia entered Australia illegally, and many feared
that France would annex the New Hebrides. Rumors of German interest in
New Guinea caused the Queensland government to annex the southeastern part
of that island in 1883. The British government quickly repudiated the annexation,
but in 1884 Germany annexed northeastern New Guinea and adjacent archipelagoes,
and Great Britain then reannexed the area Queensland had claimed earlier.
In the early 1880's, a federal council representing the colonies was empowered
to enact minor legislation, but had no real executive power and no authority
to collect revenue. Great Britain agreed to contribute toward
an Australian naval squadron in 1888, and the inadequate condition of Australia's
defenses was linked to the need for federation. The first federal convention
took place in Sydney in 1891. It produced a first draft of a constitution
modeled on that of the United States, with power divided between the federal
and state governments. The lower house would have representation based
on the population of each state, while the upper house would represent
the states equally.Because of severe economic depression in the eastern
colonies, little more was done for five years. Propaganda in favor of federation
continued, however, and in 1895 the colonial premiers agreed to call another
convention, to submit any constitution it might draw up to the voters,
and, should that be accepted, to ask the British parliament to enact it
as law. In 1897, the second federal convention adopted a draft based on
the one produced in 1891. Amendments suggested by the colonial parliaments
were then considered at second and third sessions. Referendums held in
the three southeastern colonies, Victoria, South Australia, and Tasmania,
accepted the draft constitution by large majorities. In New South Wales,
however, the majority in favor, only 5,367, fell far short of the prescribed
minimum of 80,000 affirmative votes. New South Wales feared domination
by the other, less populous colonies as well as the imposition of a protective
tariff. Amendments were adopted to appease New South
Wales; they related to revenue sharing and the site of the federal capital.
A second referendum, in 1899, resulted in all five eastern colonies accepting
the amended constitution. Western Australia held back until 1900, but assented
to it at about the same time the British parliament approved it. The desire
for internal free trade, and for common action in defense, immigration,
and industrial and financial matters, eventually persuaded all the colonies
to join the union. The Commonwealth Constitution Bill passed through the
British parliament in spring 1900, and Queen Victoria granted royal assent
on July 9. The Commonwealth of Australia was instituted on Jan. 1, 1901.

In the political life of Australia between
1901 and 1914, there were both free trade groups and protectionist groups,
with labor holding the balance of power and eventually supporting the enactment
of tariffs. Other important measures that were passed during this period
provided for old-age pensions and for a system of conciliation and arbitration
in labor disputes. The trend of the period was toward a strengthening
of the central power at the expense of that of the states, principally
because economic problems were increasingly national. Tariffs and immigration
policy were handled by the federal government. The High Court of Australia
gave considerable, but not unlimited, support to the increase of federal
power. Customs duties brought large sums to the federal treasury; the federal
government took over the existing debts of the states in 1909 and compensated
the state governments for their loss of customs and excise receipts with
a small annual payment per person. At the peace conference in Paris at the
close of the war, Prime Minister Hughes represented Australian interests
with considerable asperity and demanded the maximum of reparations. Fearing
the proximity to Australian territory of a potential enemy, he demanded
that Australia be allowed to annex any lands that it had conquered during
the war and opposed the proposal that the former German colonies become
mandates. He had to be content to allow Japan to hold the former German
Pacific possessions north of the equator; Australia accepted a Class C
mandate for, and became responsible for administering, German New Guinea,
the Bismarck Archipelago, and the northern Solomon Islands.

Foreign Policy and Defense

The government of Australia, despite its
lack of independence in foreign and diplomatic affairs, showed decided
interest in certain problems, especially those involving the Pacific. Australian
spokesmen defended Australia's interests at the Colonial Conference of
1902 and at the Imperial Conferences of 1907 and 1911. In 1909 the government
established the post of high commissioner for Australia in London. Australia
made no claim to autonomy in the control of its own foreign affairs but
desired to be able to state its wishes to the British government and to
be informed of British policies. Australia also showed considerable concern
for military and naval defense. In 1905 a Council of Defense was created,
and a federal act of 1909 adopted the principle of compulsory military
training. A system was established whereby there was an exchange of officers
between the British army and the Commonwealth staff. Similar interest was
shown in naval matters, and the Royal Navy was created in 1909.

Economic Development

Between 1901 and 1914 the population of Australia
increased from 3,750,000 to almost 5,000,000. Economic development was
highly encouraged and optimism for the future was shown by government borrowing
for public works, particularly railroads, of which some 5,000 miles (8,000
km) were constructed in these years. The number of factories and factory
workers increased. By 1914 the labor unions contained a larger share of
the total population than the unions of any other country.

Immigration Policy

During these years, the Commonwealth government
took over the immigration policies previously controlled by the states.
It strongly encouraged immigration from Great Britain, but enacted legislation
to restrict the entry of Asians and Pacific Islanders. After federation,
the commonwealth decreed that newcomers be tested for their ability to
take dictation in a "prescribed" language. This became the principal means
of enforcing the "White Australia policy," which largely restricted immigration
to people of European descent until the 1960's. The commonwealth also repatriated
the Kanaka sugarcane laborers who had worked in Queensland, and further
protected the sugar industry against imports produced by cheap labor. This
policy also had racial overtones, although it was largely economic.

When war broke out in 1914, Australia's Labor
prime minister, Andrew Fisher, promised to help Great Britain "to the last
man and the last shilling." The Australian Imperial Force (AIF) received
its baptism of fire at Gallipoli on Apr. 25, 1915. April 25 (Anzac
Day) has been a national day of commemoration ever since. After Gallipoli
was evacuated in December 1915, most of the Australian force was transferred
to France. Near the end of 1916 Labor Prime Minister W. M. Hughes decided
that conscription had become necessary. He was forced by his political
opponents to hold a referendum on the issue, and his proposal was defeated.
In 1917 Hughes formed a new war cabinet formed of five Laborites who favored
conscription and six non-Laborites. The Nationalist Party thus came into
being, but another attempt to introduce conscription failed.

After the peace conference, the wartime coalition
fell apart. The refusal of rural interests to support a Nationalist government
led by Hughes forced his resignation in 1923 and led to the formation of
a Nationalist-Country Party coalition. In 1927 this government began the
moving of the federal capital to Canberra. It brought 300,000 immigrants
to Australia and began the transformation of the Commonwealth Bank into
a central bank by giving it the power to issue paper money and fix discount
rates and by making it the depository for commercial banks. In the late 1920's the government adopted
a policy thought by the opposition to be hostile to labor. It took strong
action against strikes and proposed to abandon arbitration in most cases.
Faced also with a growing industrial depression, it lost popularity. In
1929 the Labor Party took office, only to face worldwide economic depression.

Labor Government

As an important producer of primary commodities,
Australia quickly felt the effect of falling prices from 1929 to 1931.
To meet the serious situation, the federal government decided on a reduction
in government salaries, a cut in pensions, and a scaling down of interest
rates on bonds. The Arbitration Court ordered a 10 percent cut in real
wages. The currency was stabilized at a depreciated ratio. Finally, the
Commonwealth Bank agreed to make credit available for unemployment relief
works and rural relief to meet government deficits. In December 1931 the United Australia Party
elected an absolute majority of the 75 members of the House of Representatives
and formed an anti-Labor government. By 1932 the Labor Party had lost control
of all but one state government.

International Relations

After the end of World War I, Australia joined
the League of Nations. The Australian navy was reduced. During the depression
compulsory military service was abandoned. In the early 1930's defense
expenditures were extremely low. Although there was some increase after
1935, there was little real armament until after the Munich crisis of 1938.
Through the first two years of World War II, the Australian government
continued to maintain a policy of good relations with Japan, despite the
fact that Japan objected to its unfavorable balance of trade with Australia.

Robert G. Menzies had been prime minister
for only five months when his government joined Great Britain in declaring
war on Germany on Sept. 3, 1939. Supporting the "Motherland" was regarded
as a duty of empire. The government immediately raised an expeditionary
force, the second AIF, which fought in the Middle Eastern and North African
campaigns of 1940-1942. Menzies' coalition government encountered increasing
opposition, however, and eventually the Labor Party leader, John Curtin,
was commissioned to form a new government on Oct. 7, 1941. The Japanese attack on Pearl Harbor on Dec.
7, 1941, came exactly two months later. Japan's simultaneous attack on
Malaya, where the AIF's 8th division was supporting the British, caused
Curtin's government to declare war on Japan the next day. The Japanese
rout of the allied forces in southeast Asia over succeeding weeks shattered
Australians' trust in the ability of the British navy to protect them from
invasion. On December 26 Curtin signaled a fundamental shift of national
allegiances by announcing, "Australia looks to America, free of any pangs
as to our traditional links of kinship with the United Kingdom." Defying
British prime minister Winston Churchill, Curtin withdrew the AIF's 6th
and 7th divisions from the Middle East to defend Australia. The Japanese
landing in New Guinea in January 1942, followed by air raids on Darwin,
Broome, Townsville, and other northern Australian towns added urgency to
this decision. In April 1942 U.S. General Douglas MacArthur arrived in
Australia to become commander in chief of the southwest Pacific region,
in charge of the Allied military counteroffensive. Both the Royal Australian
Navy and the Royal Australian Air Force expanded and became more active,
and by May the threat of a Japanese invasion had receded. Germany's surrender
in May 1945 allowed the Americans and British to begin an all-out drive
against the Japanese, which Australia had been urging for three years.

During World War II, the Labor government
had adopted the British Statute of Westminster of 1931, which gave some
dominions, including Australia, legislative autonomy. The government greatly
expanded independent Australian diplomacy, and the external affairs minister,
Herbert V. Evatt, played an active role as a spokesman for the smaller
nations in drawing up the United Nations charter and supporting the move
toward independence of Indonesia and other new nations of the region. The war ended on a note of optimism and
confidence in Australia. The Labor government under Prime Minister Joseph
B. Chifley, who replaced Curtin after the latter's death in July 1945,
put forward plans for economic development. Between 1946 and 1949 legislation
was passed providing for a welfare state, with a comprehensive system of
health, old-age, unemployment, and other disability benefits. Social services
were transferred to federal control. The government fostered enterprises
in aviation, shipping, and banking that steered Australia midway between
a free-enterprise and a planned economy. It introduced a system of commonwealth
scholarships for university education, designed both to raise the intellectual
and professional life of the country and to ensure careers for those with
talent. It created the Snowy Mountains Authority in 1949 to irrigate the
dry interior of southeastern Australia and generate cheap electricity.
It also assisted immigration to meet labor shortages in the postwar boom. Massive postwar immigration helped transform
Australia from a remote British outpost of empire to an independent nation.
Increasingly, immigrants came from a variety of countries, so that Australia
ceased to be an almost exclusively British nation. Between 1949 and 1968,
about 1,018,000 immigrants came from Great Britain and about 808,000 from
elsewhere in Europe. Many arrived with financial assistance from the Australian
government under the subsidization plan it sponsored beginning in 1947.
With the official ending of the White Australia policy in 1966, increasing
numbers of immigrants came from the Middle East and Asia. After the Communist
victories in southeast Asia in the mid-1970's, large numbers of refugees
came from the countries of that region, many as boat people who risked
storms, unseaworthy vessels, and pirates to reach the freedom and opportunity
Australia represented. By 1991 Asian-born people made up 4.1 percent
of the Australian population, compared with 0.3 percent in 1947. The largest
number of Asian immigrants came from Vietnam (133,440 Vietnam-born residents
in Australia in 1991), Malaysia (84,090), the Philippines (74,330), Hong
Kong (73,210), China (68,510), and India (65,430). The Vietnamese, Malaysians,
Filipinos, and natives of Hong Kong were among Australia's 11 largest immigrant
populations. Other groups in the top 11 were people born in the United
Kingdom and Ireland, Italy, New Zealand, the nations formerly comprising
Yugoslavia, Greece, Germany, and the United States. Australia's population
passed 17 million in 1991, an increase of more than ten million in 50 years.
Despite the long-term movement toward ethnic and cultural diversity, people
from the British Isles (1,222,000 or 7 percent of the total population)
remained the largest group of those born overseas. Following the war, great political change
swept Australia. By 1949 it was clear that the Labor government had lost
touch with the drift of political events and sentiments. Despite Communist
gains in Europe and the Communist victory in the Chinese civil war, the
government's defense plans were based on fear of military resurgence in
Japan. Dissatisfaction with Labor's domestic policies mounted. Gasoline
rationing continued, although, beginning in 1948, the highly popular General
Motors "Holden," Australia's first locally manufactured, mass-produced
automobile, was placing private automobile transportation within the reach
of the average family. Wartime economic controls seemed out of place as
the nation entered a long, consumer-driven postwar boom. In pursuit of
Labor's socialist ideals, Chifley endeavored, ultimately unsuccessfully,
to nationalize the privately owned banks. The same year, 1949, labor struggles
in the coal industry, initiated by the Communist-dominated unions, disrupted
industry, business, and private lives, a problem Chifley tried to solve
by sending troops to run the mines. Such events raised doubts about Labor's
ability to govern, and fanned popular fears of creeping socialism and the
"Red menace." In December 1949 R. G. Menzies again became prime minister,
swept back to power at the head of a Liberal-Country Party coalition on
an electoral platform of free enterprise and anti-Communism. Under Menzies, who remained prime minister
for 16 years and instituted an unbroken 23-year period of Liberal-Country
Party rule, Australia became the "lucky country," its citizens enjoying
the affluence of industrial prosperity. As private home ownership became
an achievable reality for people of all classes, the suburbs of the capital
cities expanded rapidly while the new skyscrapers of corporate capitalism
transformed the central business districts into traffic-filled canyons
of glass and concrete. Canberra, once derided as the "bush capital," a
well-lit sheep paddock of widely interspersed monuments, became a neat
and leafy city of noble public buildings displaying the confidence of the
new wealth. Secondary and university education facilities multiplied rapidly
with government support, for the first time opening educational opportunity
to the wider population. The use of the international jet airplane; the
exportation of coking coal, iron ore, copper, alumina, gold, silver, lead,
and zinc; the opening up of new Asian and American markets for wool, wheat,
and meat; and the discovery of oil and natural gas finally destroyed the
remnants of the old bush culture and dependence on Great Britain. Australia
emerged as a highly industrialized and urbanized middle-sized world power.Menzies, an avowed royalist and Anglophile who boasted
he was "British to the bootstraps," nevertheless strove to cement Australia's
alliance with the United States as the latter sought to "contain" Communism.
Under his government's foreign policy, Australia's realignment of allegiances
away from Great Britain and toward the United States became more pronounced.
At the onset of the Korean War he sent Australian naval forces to assist
the United States and soon assigned a contingent of volunteers from the
regular army. In 1951 Australia formed the ANZUS pact with the United States
and New Zealand, a treaty that was to remain the crux of Australian defense
policy for almost four decades. In 1954 Australia joined SEATO, and in
1955 Australian military forces were stationed in Malaya to help the British
suppress Communism there. The Liberal-Country Party coalition committed
troops to Vietnam 1965-1972; later a Labor government gave support to the
U.S.-led action in Iraq in 1991 and to that in Somalia in 1992. The conflict in Vietnam, Cambodia, and Laos
proved to be a turning point for Australia. Menzies responded to the Vietnamese
civil war by introducing a selective plan for compulsory military service
and sending 800 troops to South Vietnam in 1965. In April 1966 Harold Holt,
who had succeeded to the prime ministership on Menzies' retirement that
January, increased the Australian force in Vietnam to 4,500. The death
in action of the first of the Australian conscripts sparked a bitter, long-running
debate on the wisdom of the government's defense policy and its allegiance
to the United States. Government supporters believed it was necessary
to back U.S. policy on Vietnam because Australian security depended on
the promise of U.S. assistance under the ANZUS treaty. They also maintained
that military intervention on the Asian mainland was justified in order
to prevent Australia from becoming the "last domino" in Communism's southward
advance. The Labor Party, some church leaders, intellectuals, university
students and academics, and the more liberal newspapers emerged as the
vocal and demonstrative opponents of the government's unwavering acceptance
of U.S. policy in southeast Asia epitomized in Holt's promise to go "all
the way with L.B.J." The mounting unpopularity of the war did not persuade
the government to change its policy. John Gorton, who succeeded to the
prime ministership in January 1968 (after Holt's disappearance while surf
swimming), pursued the same foreign policy. Gorton and the Liberal-Country
Party coalition retained power after the 1969 elections, but with reduced
support. Faced with dissension within the party, Gorton resigned in 1971
and was succeeded by William McMahon. McMahon's government finally withdrew Australian
troops from Vietnam in February 1972, but foreign policy remained an issue
in the December 1972 elections, when the voters returned Labor to federal
office for the first time since 1949. Popular fears about Labor's susceptibility
to Communist influence, an issue over which the party split disastrously
in 1955, had kept Labor in an electoral wilderness for a generation. Rejuvenated
after 1967 under the leadership of E. Gough Whitlam, who now became prime
minister, Labor launched an ambitious program of reform. The new government
immediately ended military conscription, freed the draft resisters from
jail, and established diplomatic relations with China. It went on to introduce
bills to promote education at all levels, expand welfare, institute universal
health insurance, and provide tax relief for the poor. Other key elements
of the program included the establishment of a federal Department of Aboriginal
Affairs to bring to Australia's generally disadvantaged indigenous peoples,
the Aborigines and Torres Strait Islanders, the benefits other citizens
enjoyed. The Labor government also created regional urban growth centers
to relieve the continual outward sprawl of the capital cities; formed the
Australia Council, a federal agency for promoting and subsidizing the arts;
and, in 1975, granted independence to Papua New Guinea. Labor was unable
to implement other reforms because doing so depended on the good will of
the Senate, which it did not control. In 1974, Whitlam dissolved parliament
when the Senate rejected an appropriations bill. Labor retained its majority
in the House of Representatives in the subsequent elections, but again
failed to win control of the Senate. By this time worldwide recession and inflation
were having profound influence on the Australian economy. Labor's generous
wage concessions, big-spending policies, and slashing of tariffs worsened
inflation and unemployment. After a series of ministerial firings, some
attended by allegations of financial or personal impropriety, the public
perception that Labor had lost direction grew throughout 1975. In October
the opposition leader, J. Malcolm Fraser, refused to pass budget bills
in the Senate until the government called an election. In an unprecedented
action, the governor-general ended the deadlock by dismissing Whitlam and
appointing Fraser interim prime minister pending elections. Bitter controversy
over the governor-general's action divided the nation. In the elections
that followed, the voters delivered their verdict by giving the Liberal
and National (formerly Country) party coalition a record majority in the
House and a majority in the Senate. Despite the continuing political controversy
over the coalition's accession to power, the new government's main problems
were economic -- a sluggish economy and rising inflation and unemployment.
Fraser gave top priority to fighting inflation, and at first enjoyed success
by reducing the rate from the double-digit figures of the Whitlam years.
His government was returned in two further elections, in December 1977
and October 1980. During the late 1970's and early 1980's rising inflation
and worsening unemployment eroded the coalition's support. Meanwhile, Fraser's
confrontational manner toward the union movement was a factor in the mounting
rate of industrial disputes.

In February 1983 Fraser called an early election,
hoping to catch the Labor Party, diverted by a leadership struggle, unprepared.
This strategy failed, for the newly installed Labor leader, R. J. L. (Bob)
Hawke, not only enjoyed great public popularity but was able to offer voters
a clear-cut choice between policies as well as between leadership styles.
In elections in March Labor defeated the coalition decisively and Hawke
became prime minister. His consensual approach to labor-management issues,
resulting in a wage accord, gave the nation a period of industrial peace
unusually long in Australian experience. A striving for consensus became
the hallmark of Hawke's prime ministership, extending into areas as diverse
as taxation reform, job creation, restructuring of the education system,
and improving relations between the indigenous peoples and other citizens. Under Hawke and his treasurer, Paul J. Keating,
Labor turned its back on its mildly socialist tradition. For decades this
had been built on a pro-worker philosophy that emphasized the need to extend
social services and maintain a mixed economy embracing both public and
private enterprise. Labor now adopted pro-business policies and courted
the private business sector. It kept wage increases to a minimum, deregulated
financial markets, and allowed foreign banks to begin operating in Australia.
It then began opening publicly owned enterprises to private ownership and
allowing privately owned firms to compete in industries once monopolized
by government agencies. The finance industry boomed for a time, until the
international stock market crash of October 1987. Mounting public and private
debt, a succession of spectacular corporate failures, crises within the
rural and manufacturing sectors (the products of which were increasingly
uncompetitive in both overseas and domestic markets), a large balance of
payments deficit, and high inflation characterized the economy as it slid
into recession in 1991. The government's response was to depreciate the
currency, cut public spending, maintain high interest rates, and avoid
making tax concessions. Unemployment rose despite such measures: 6 percent
in 1989, it passed 10 percent in 1991 and in 1992 reached 11 percent -- the
highest rate since the Great Depression 60 years earlier. Hawke's government had been reelected in
1984, 1987, and 1990, becoming the first federal Labor government to be
reelected for more than two consecutive terms. Despite his successes here,
his parliamentary colleagues deposed him in December 1991, opting for Keating
instead. Although Keating seemed unpopular with the electorate, being the
politician the public regarded as most responsible for the recession, his
colleagues believed Labor had better chances of reelection with him as
leader rather than Hawke.After 16 months as prime minister, Keating, in March
1993, led Labor into an election in which the party was widely expected
to lose office after a decade in power. Following a campaign fought largely
over the Liberal-National opposition's proposal for introducing a general
consumption tax, Labor won a surprising victory and increased its majority
slightly. Electorally confirmed as prime minister, Keating faced urgent
problems, chief among which was to lead the nation out of recession. Another
was to respond to the High Court's 1992 finding in the "Mabo" case, which
had far-reaching implications for Australia's system of land tenure. (In
ruling that certain indigenous citizens still held "native title" to the
land, the court had upset two centuries of accepted legal assumptions about
the validity of Great Britain's occupation of Australia.) At the same time
Keating took the nation in new directions -- for example, initiating
debate on whether Australia should abandon the monarchy to become a republic
and instituting a ten-year process of "national reconciliation" between
the nation's indigenous and non-indigenous peoples.